Commodity Update, Friday, 28th of August, 2020
Yesterday saw a gold drop from $1977.26 to a daily low of $1909. 89 during FED Powell’s speech outlining the FED’s flexible approach to accommodate periods of higher inflation within reason which some have interpreted to be around 2.5%. This new tactic will help the FED follow through with keeping interest rates on hold whilst at the same time help the FED reach its inflation target of 2%. Conversely extended periods of High inflation without subsequent rate hikes could hinder dollar value in the future. This sentiment appeared to follow through as Gold quickly recovered and now trading at around $1943.00 per ounce.
In focus will be the long-awaited agreement on a fiscal stimulus package particularly after poor jobless claims earlier in the week together with the US presidential elections could see the yellow metal finish the last quarter on a High!
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